Hey device makers. There are some new challengers in the marketplace, and they're here to take your lunch money. According to a new report by PwC, the U.S.'s nearly $3 trillion healthcare industry is experiencing the same sort of dramatic shift seen in retail, banking, entertainment, and other industries as “new entrants,” companies whose core business resides entirely outside of healthcare or are expanding into new roles, capture more of the market. A survey by PwC’s Health Research Institute (HRI) found that new entrants coming from all over – retail, technology, telecom, even automotive - are threatening to draw about $64 billion in revenue from traditional providers. Currently, 24 of the 38 Fortune 50 companies with a major stake in healthcare are new entrants.

And consumers prefer it that way. New entrants in medtech could do the same thing to your doctor's office that Amazon.com did to your local bookstore.

HRI research shows that products offered by established companies like Apple, Samsung, Walmart, and Nike as well as a number of startups are seen as viable alternatives to tradition methods of healthcare. In a survey of 1000 consumers roughly one in two said they would be “somewhat likely” or “very likely” to choose a new entrant alternative if it cost less than a traditional choice (e.g. visiting a doctor's office).

Some notable points from the survey:

58.6% would prefer an at-home strep test bought in a store.

54.8% would prefer to send a digital photo of a rash or skin condition for a dermatologist to diagnose.

54.5% would prefer to check vital signs using a smartphone device.

41.4% would do urinalysis at home using a smartphone device.

36.7% would prefer to have chemotherapy at home.

64% said they are open to trying new, non-traditional ways of seeking medical attention or treatment “if the price is right.”

Ed Yu, principal of PwC's Health Industries Innovation & Growth, says this trend isn't a bubble. “The shift in profit is real and measurable,” he says. “The impact is going to be on [medical] device companies first because they are a technology-based business that a non-healthcare tech business can attack.”

Traditional companies have been skeptical of new entrants thus far, citing their lack of regulatory understanding in addition to the bigger question of profit. Yu says up until recently a lot of executives questioned the profitability of technologies offered by new entrants. “You can cite all of the different the big companies from outside healthcare that have ventured into healthcare and they've spent a lot of money. But how much money have they made?” Yu says.

But this perception is changing as more and more new entrant companies are getting their products FDA approved. “One day very soon those pedometers that you have connected to your phone will get FDA approval and when that happens guess what? You're a medical device company. The tide is changing very quickly,” Yu says.

New entrants's ability to easily pivot, even in the face of regulatory standards, has been a big factor in earning them a strong foothold. “When you have inertia as an existing company, like the medtech industry, they have a lot of capital and lot of smart people. It's really hard to change the way you operate and look at things so far off field,” Yu says. “For a new entrant, when you look at what they actually do, they generally go at in a way that's sort of blissfully ignorant. They don't understand or appreciate regulatory constraints.”

Consumers will, of course, welcome any technology that adds ease and convenience to their healthcare, but in the face of this convenience also comes a lower cost. Lower costs also means lower profits. And while this isn't so much a concern for new entrants, large, traditional companies may balk at the blow to their bottom line. “I think that's particularity what most medtech companies are concerned about today – commoditization,” Yu says.

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And all of this has yet to even mention insurance companies. Even with new incentives toward preventative care mandated by the Affordable Care Act, consumers have to be wondering if their insurance provider will be able to play nice with a consumer products company. “It is a phenomenal shift in funding flow,” Yu says. “When you think of how money flows in terms of profit, it has historically flowed from traditional insurers.”

While critical care issues will always need hospitalizations and more traditional methods, PwC is seeing chronic disease care shift toward a consumer pay model. “I can get a mobile app to help me better manage my eating habits so that I manage the risk of diabetes. That's shifting funds away where I don’t need the payor anymore,” Yu explains.

But are the Medtronics, St. Judes, and Boston Scientifics of the world doomed to go quietly into the night? PwC's report sees challenges on both sides and sees the true path to success for both new entrants and traditional companies lies in partnership and sharing resources. “As cheaper options emerge, especially for commodity services, traditional healthcare companies should evaluate which services are worth defending. The loss of less-lucrative services could free space and time for higher-value offerings,” the report states.

“You have to play to win. If you're a traditional player and you're playing not to lose you're already the runner up,” Yu cautions. “The thing here to is look at some of these companies that really seem to be making some headway and are doing some interesting things and look for opportunities to partner. The reality is that [new entrants] don't know the regulatory landscape and you do. So you have about about as much to offer as they do in technology. In my view that's the more important message to the incumbents.”